Internet outrage: How to find a forex broker in an age of online mistrust
We’ve all been there: ready to pull the trigger on a hotel stay or a restaurant meal, we just check the reviews at the last minute and, in amongst the overwhelmingly positive critique, there’s that one negative review that eats away at you.
The service was slow, the waiter forgot our side of fries, the restaurant was hot, our hotel room had cobwebs in the corners, the bedside lamp didn’t work…and so on.
Isn’t it strange that the one bad review is somehow more meaningful than the dozens of positive!? There’s actually some science to that, and it’s believed our Palaeolithic ancestors learned not to be eaten by wild animals by having bad memories of their family members suffering a similar fate.
Anyway, the problem is that internet reviews need to be taken in context and with the understanding that the reviewer may have ulterior motives for their actions. Horror stories, misunderstandings and simply ‘bad days at the office’ remain forever immortalised thanks to Google’s algorithm, and these can be incredibly damaging for a business.
The world of forex trading is one such example. A broker can enjoy hundreds of positive reviews about their services, and that one bad piece of feedback sticks out like a sore thumb – that’s why reliable information about forex brokers can be so hard to find.
If you plan on trading forex pairs through a brokerage service, you will need to be discerning in your choice of broker and, of course, do your due diligence – like any sector, there are the good and the bad hoping to add you to their client list.
To help you on your path, here’s a quick checklist of things to look out for when shortlisting potential brokers – and yes, this list goes beyond just reading reviews online!
Whatever you want
In effect, all forex brokers offer the same services – but some specialise in specific areas.
Some brokers are determined to offer the closest spreads on the major currencies, whereas others pride themselves on their huge range of minors and exotics.
Getting to know the motivating factors behind a broker can help you to decide which is right for you, so it is recommended that you take the time to get to know their platform first – who has the tightest spreads? Who offers the widest choice of minors and exotics? Who offers the highest leverage?
Once you have accumulated the answers to these questions, you will have a better idea of which broker is right for you.
Getting hands on
A fundamental decision you will have to make in your trading is whether or not you will be an active, ‘hands on’ trader or more of a passive investor – somebody that is happy to sit back and wait for the profits to roll in over a longer timeframe.
This decision will have a huge bearing on which broker you opt for. Take a look at all of the information a broker provides about their software and platform – can you hedge? Can you scalp? How long do positions take to be executed? Do you have direct market access?
For day and swing traders, time truly is of the essence, and you need the support of a broker that will provide the tools you need to get in and out of the matter in as rapid a fashion as possible.
If you are new to forex trading, the chances are that you will need to embark on a long learning curve before you can become a profitable long-term investor.
As part of that process, you might want to take some time to examine what educational content a broker offers, because this will form a key role in your ‘improvement’ as a trader.
It could be blogs and tuition videos right through to signals, indicators and relevant news stories, as well as other learnings that will help you to understand forex trading in greater detail.
As you become more experienced, the chances are that you will want to examine technical and fundamental analysis in greater detail. This is not for the faint-hearted in the early going, and so if your broker offers a walkthrough of the various tools and charts you can use, then this will be most welcome.
Getting it right
There is no exact science to finding the right forex broker.
However, by taking the right steps – including those listed above – you can significantly narrow the field and find the broker that best suits your needs and trading style.
So don’t worry about sifting through the noise, because all of the information you need is at hand.